European stocks edge higher ahead of key inflation release; ECB meeting looms

Published 03-06-2025, 12:34 pm
© Reuters

Investing.com - European equity indices edged higher Tuesday in cautious trade ahead of the release of the latest inflation data for eurozone, in the run up to the next European Central Bank meeting.

At 03:02 ET (07:02 GMT), the DAX index in Germany climbed 0.3%, the CAC 40 in France gained 0.2% and the FTSE 100 in the U.K. rose 0.3%. 

Eurozone inflation due

Tuesday’s highlight will be the release of the flash eurozone inflation figures for May, which precede the policy-setting meeting of the European Central Bank later in the week.

Expectations are for consumer prices to have slowed to an annual 2.0% last month after April’s larger-than-expected 2.2% rise, which is seen providing the ECB with room to cut interest rates by a quarter point once more on Thursday, in what would be an eighth rate reduction in the past year.

This week’s reduction is largely priced in, and thus what the central bank does next will be the main question on investors’ minds.

U.S. tariff uncertainty, heightened further by ambiguity over court rulings on the legality of the tariffs, makes the backdrop challenging as the ECB weighs the impact to business activity against implications for inflation further out.

Trade talks still in spotlight

Investors will also be monitoring any developments in trade talks, after negotiations between the U.S. and China, the two largest economies in the world, soured last week. 

U.S. President Donald Trump and Chinese leader Xi Jinping will likely speak this week, White House press secretary Karoline Leavitt said on Monday, days after Trump accused China of violating an agreement to roll back tariffs and trade restrictions.

The Trump administration is also urging countries to present their most favorable trade proposals by Wednesday, according to a report from Reuters, citing a draft letter to negotiating partners. 

This move is part of an effort to speed up discussions with multiple partners before a self-set deadline in five weeks.

British American Tobacco (LON:BATS) supported by U.S. growth

In the corporate sector, British American Tobacco (NYSE:BTI) said that first-half revenue is expected to come in slightly ahead of previous guidance, supported by growth in its U.S. business and gains in modern oral products, particularly Velo.

Swiss wealth management Julius Baer (SIX:BAER) has unveiled a new three-year strategy and financial targets through 2028, following a review of its operations under new leadership.

Airbus (EPA:AIR), the world’s largest aircraft, delivered around 51 airplanes in May, industry sources said, down 4% from the same month last year. The tally brings deliveries so far this year to around 243 aircraft, down 5% from the first five months of 2024.

Crude gains on supply disruptions

Oil prices edged higher Tuesday, extending the prior session’s sharp gains as uncertainty over a U.S.-Iran nuclear deal and worsening tensions between Ukraine and Russia heralded more potential supply disruptions.

At 03:02 ET, Brent futures climbed 0.4% to $64.82 a barrel, and U.S. West Texas Intermediate crude futures rose 0.5% to $62.81 a barrel.

Iran is expected to reject a U.S. proposal to end a decades-old nuclear dispute, meaning continued sanctions, which would limit Iranian supply and be supportive of oil prices.

Both contracts gained nearly 3% in the previous session after the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, agreed to keep output increases in July at 411,000 barrels per day, which was less than some in the market had feared and the same hike as the previous two months.

 

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.